Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1023464 | Transportation Research Part E: Logistics and Transportation Review | 2013 | 11 Pages |
Lean distribution networks have been increasingly exposed to the risk of unpredicted disruptions causing significant economic forfeitures. At the same time, the existing literature features a limited number of studies which consider fortification of facilities for improving network reliability. In this paper, we develop a reliable uncapacitated fixed-charge location model with fortification to support the design of distribution networks. The model considers heterogeneous facility failure probabilities, one layer of supplier backup, and facility fortification within a finite budget. The problem is formulated as a nonlinear mixed integer programming model which is proved to be NPNP-hard. We develop a Lagrangian relaxation-based (LR) heuristic solution algorithm and demonstrate its computational efficiency for solving large-scale problems.
► We develop a reliable uncapacitated fixed-charge location model. ► We consider heterogeneous failure probabilities and one layer of supplier backup. ► Model incorporates facility fortification within a finite fortification budget. ► An efficient Lagrangian relaxation solution heuristic is developed. ► Sensitivity analysis is conducted on the rate of return on fortification.